Wednesday, October 29, 2008

Capital goods are the things that businesses invest in to make people more productive (e.g., computers, machinery, factories). As such they are the seed corn of future growth. The impressive thing about business investment is that it has not fallen as it usually does in recessions. It may not be growing a lot, but considering the pervasive doom and gloom and the supposed difficulty in obtaining financing (which, as I've argued, is largely a myth), it's pretty impressive and at the very least suggests that businesses remain optimistic about their own future. A very healthy sign, and one reason I say the jury is still out on whether this is a recession.